Your FAQs
When is a managing Principal contractor a good choice?
If you already have a supply chain, and you know who you want to do the job but you don’t have the resource to manage the delivery of the project.
If the project is M&E heavy, and there is no natural fit within the contractor force for Principal contractor. Ie, no one skilled knowledgeable and able to take on responsibility for the safety of the whole contract including the other contractors, or perhaps no one contractor who is likely to be physically present on site for the full duration of the works.
CDM is for Construction, why are we talking about it for engineering in a process facility?
Under HSG153 with is the Approved code of practice on the Construction (Design and Management) Regulations 2015 (CDM 2015), construction work is broadly defined to include activities such as building, altering, maintaining, and dismantling structures. Engineering and maintenance work in process plants often involves tasks such as:
- Modifying or dismantling process equipment and structures
- Installing or replacing mechanical and electrical systems.
- Undertaking activities like pipework installation, commissioning, or decommissioning.
The approved code of practice (ACOP) on CDM2015 L153 defines construction as:
“the construction, alteration, conversion, fitting out, commissioning, renovation, repair, upkeep, redecoration or other maintenance (including cleaning which involves the use of water or an abrasive at high pressure, or the use of corrosive or toxic substances), de-commissioning, demolition or dismantling of a structure;”
“the assembly on site of prefabricated elements to form a structure or the disassembly on site of the prefabricated elements which, immediately before such disassembly, formed a structure”
“the installation, commissioning, maintenance, repair or removal of mechanical, electrical, gas, compressed air, hydraulic, telecommunications, computer or similar services which are normally fixed within or to a structure”
On this basis, Collard & Co Ltd view works carried out during a maintenance shutdown, expansion or upgrade of a process plant as falling under the definition of construction work as in CDM 2015, and consequently that the CDM regulations are the appropriate legal vehicle for the management of such projects, and it’s our experience that that the HSE are of the same view.
What does managing a project under CDM look like?
CDM sets up a legal structure for delivering the project, where three key roles are identified; Client, Designer and Contractor. Broadly speaking, client is the duty holder with the least responsibility, Designers have responsibility for a project which can be constructed, used and maintained safely, Contractors have responsibility for the health and safety of the construction phase of the project. From a practical perspective, this is where most of the safety and legal risks reside. The overwhelming majority of enforcement action is against organisations which have the contractor role.
How is this done elsewhere?
In most construction projects, the Principal Contractor is the largest organisation and the one who has successfully tended for the whole package of works. This means they have commercial duties and responsibilities and ultimately, they’re trying to make a margin on the whole value of the job. In situations where the client doesn’t want to be involved in the project delivery this may work well, however in a process environment the client is likely to have to be intimately involved in the delivery of the project as there will be interfaces with the operational site. In addition, the client will frequently have designed the project, in whole or in part, as they are going to be the ones inheriting the completed project to operate and maintain. In these circumstances, and particularly where many of the suppliers and sub -contractors delivering the project are already trusted partners of the client, it can be difficult to see what value a traditional Principal Contractor is adding for their margin.
In order to have the right level of professionalism, health and safety and compliance it’s likely that a regional tier 1 or tier 2 contractor would be required, such organisations necessarily have aggressive commercial departments and thousands of hours can be wasted with commercial departments locked in contractual disputes, arguing backwards and forwards about additional costs.
Collard & Co are different. We agree with the client up front the resources required and time scales they’re required for and issue costs based on that. If the required resources don’t change, neither does the price. You pay all the subcontractors and suppliers direct as you usually would, we take no part and no margin from your commercial arrangements what so ever.
Costs are based on the required resource level but typically come in between 4% and 6% of the project costs, we’ve seen as low as 1% and as high as 11% – in general the more intensive the program the more value we can add.
CDM places some fairly onerous legal duties on the principal contractor, almost everything which happens in terms of health and safety on the site during the delivery of the project if the principal contractor’s legal responsibility. There’s an expectation from the HSE that there will be a competent site manager appointed to the project to control the day to day running.
Couldn’t I do this my self?
Yes – you can accept the appointment yourself or give it to someone else in your organisation, this is perfectly legitimate, as long as they appointee has the skill knowledge and experience to carry out the duties. The CDM regulations say that you can’t make an appointment or accept an appointment unless you’re satisfied that both parties are competent.
What if I don’t appoint anyone?
The CDM regulations are written such that if the client doesn’t appoint other duty holders, their duties rest with the client. In effect, doing it your self and doing nothing have the same effect from a legal point of view, all the legal duties of a Principal contractor with regards to monitoring and managing the construction phase would rest with you.
